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What is short delivery and what are its consequences?

Short delivery means the seller of the shares has defaulted on the settlement of shares. Short delivery is an event where the seller of the shares, defaults on the delivery of the shares by T+2 Days. In such cases, the exchange holds an auction for the same quantity of shares & delivers it to the buyer. (In this case, the settlement time will be T+3 days)

Short delivery can happen in stocks with less liquidity, or if a short MIS/BO/CO hasn’t been squared off in some circumstances.

In this case, you will be notified of the same via SMS and email. (Click here to know more about short delivery).

Note: In the case of physical settlement of derivatives, the exchange conducts an auction on T+3 days, if the seller defaults on the delivery. (In this case, the settlement time will be T+4 days)